2020 Scorecard on State Health System Performance

from Commonwealth Fund, September, 2020 (excerpts)

SCORECARD HIGHLIGHTS

Hawaii, Massachusetts, Minnesota, Iowa, and Connecticut are the top ranked states in the 2020 Scorecard on State Health System Performance.

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Prices paid by commercial insurers are higher than Medicare rates for similar services.

Researchers and policymakers have been able to track spending for health care services, but only recently have they been able to break down total spending estimates into utilization and price-per-service components. Estimates suggest that about three-quarters of the growth in health care spending between 2014 and 2018 can be attributed to price increases.13

A recent state analysis compared prices paid by commercial employer-sponsored plans for inpatient hospital services to Medicare payment rates for similar services. It found significant variation, with commercial insurers paying between 140 percent of Medicare prices in Hawaii (lowest discrepancy in USA) and 274 percent in Oregon (Exhibit 5).14 Prices can vary for a number of reasons. In Rhode Island, for example, where prices are 158 percent of Medicare, the state drove down prices through insurer rate regulation.15 The presence of market-dominant, not-for-profit insurers with strong price negotiation leverage also can work to mitigate higher prices.

High prices have consequences. When health providers charge private insurers higher prices, insurers pass along those higher costs to employers by increasing premiums. Ultimately, employees bear the burden through higher premium contributions, deductibles, out-of-pocket medical costs, and reduced wages. States where providers charge the highest prices also tended to have the highest average premium costs in terms of both employer and employee contributions (Exhibit 6)….

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BHR: National healthcare scorecard: Where does your state rank?